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5 Things To Do 5 Years Before Retirement

Hi everyone bill Leff in here for money evolution dot-com in today’s video I’m gonna be talking about five things that you should do when you’re five years away from retirement ok so right off the bat number one is get organized so if you’re planning for retirement you might have a lot of your financial information scattered into a whole lot of different places maybe you’ve got some 401k plans at work or maybe even an old 401k some IRA accounts maybe your spouse has some retirement plans or old pension benefits so the first thing you want to do is really kind of bring all of that information in together we also want to start to in that process start identifying how some of those retirement resources are going to be able to work for you to provide you with the retirement lifestyle that you want we call it your retirement gap so fortunately we’ve got a couple of tools available to help you with this process one of those but number one is get organized number two is we want to look at how we can kind of optimize some of those retirement assets that you have we call the shift money to tax advantaged accounts so as you approach retirement for a lot of people we find that your cash flow tends to improve or get a little bit better maybe your kids have moved out of the house you’re done paying for college they’re kind of self-sufficient on their own hopefully if your career and your job is going well you’re maybe making a little bit more money so you might have a little bit more cash flow available to save money for retirement but we also want to look at where some of those monies are being saved and what we find for a lot of people is if you have money and non retirement accounts taxable accounts that you have to pay income taxes every year on are there ways or opportunities for you to shift that over into tax advantaged accounts and we find for many people there are you know so take a look at are you maxing out your 401k plan some 401k plans allow you to save an additional 10% in an after-tax savings via call there’s a recent tax law that now allows you to move that money directly to a Roth IRA account even if you’re over the income limits you can contribute money to IRA accounts or Roth IRA accounts there’s lots of strategies there but can we shift money from one side of the balance sheet where you’re not getting that tax advantage over into a retirement account is number two number three is know your healthcare options so this was this came up recently and it was listed as one of the number one concerns for retirees going into retirement is how much is my healthcare gonna cost and understanding that is very important because it’s some big big price tags on this so if you know if you’re working and your employer is offering health care insurance now you want to visit the HR department find out well what do they do did they do anything for you in retirement is there any options to continue that health care especially if you are going to be retiring prior to age 65 when you’re eligible for Medicare if you’re married check out what your spouse offers – and compare those different plants are putting together some ideas of how much that health care is gonna cost because you don’t want to get blindsided by that in fact there’s actually a recent study that JP Morgan did a couple years ago and they actually said that if you had to go out into the exchanges the Affordable Care Act exchanges for a sixty four-year-old it would cost you about eighty four hundred dollars a year per person for just a silver plan so that’s not even the top level plan so understand what those options are check with your employer that’s number three number four is you want to think about your plan for income so hopefully if you’ve done some financial planning you’ve identified some of those gaps you know where those gaps are and what we find oftentimes is especially early on in retirement where your income and the expenses still may be a little bit more variable you want to understand what some of those gaps are and how much money will you potentially have to pull out of those retirement accounts are you eligible to take money out of those retirement accounts are you over fifty nine and a half if it’s an IRA are you over 55 if it’s a 401k you don’t want to get hit with any penalties start planning out what that income strategy is gonna be and maybe having some of that money in a little bit more conservative type of investment so you’re not blindsided by oh my gosh I’m retiring I need to take twenty thousand dollars of a retirement account and guess what the stock markets down so think about that plan for income and where’s the money gonna come from and the number five I love this one because I think it kind of fulfills to two issues here with retirees and it’s consider a semi retirement so I think the idea for most of us and in fact what I think about my own retirement when that happens the idea of working you know 4050 hours a week and then all of a sudden one day just you know throwing in the towel and never working again it sounds a little bit abrupt you know so we’ve been talking to a lot of clients about semi retirement and easing your way into a retirement situation where maybe you go to a part-time status maybe you do some consulting for a few years or maybe you just do a job that you’ve always wanted to do maybe that pays a lot maybe doesn’t pay a lot but it’s fun and you enjoy doing it and it can also help to sustain some of that early retirement spending needs that you’re going to have as well so again especially if you want to do strategies like maybe delay Social Security benefits having some of that semi retirement income can really help fill some of those gaps there so think about semi retirement that’s something that can be done during the planning process where you can see how that income might help your overall financial situation

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